Angie's List Shares Tumble On Weak Q2, Outlook; Analysts Slash Estimates

Angie's List ANGI shares opened sharply lower Thursday on disappointing results and a weak outlook, as analysts trimmed estimates and expressed skepticism.

Shares are down more than 20 percent.

Although the company added 210,000 new members in the second quarter, the growth rate of the category was unchanged from a year ago. Advertising revenue per unit grew at 12 percent, "the lowest level in years," Canaccord's Michael Graham said in a research note Thursday.

"Buyers will be hesitant to re-engage with the stock until fundamentals improve," Graham said, noting its third-quarter outlook failed to meet Wall Street's expectations.

The company operates a subscription-based website that enables customers to research and rate local businesses.

Graham, who maintained a Hold, cut his fiscal 2014 estimates from a loss of $0.07 to a loss of $0.11 per share, and his revenue estimates for the period to $317 million from $326 million. He also lowered his price target from $16 to $10.

Raymond James' Aaron Kessler also slashed his fiscal 2014 estimate to a loss of $0.13 per share, from a loss of $0.14 per share. Kessler's revenue estimate for the period goes to $319 million, from $328 million.

Maintaining a Market Perform rating, Kessler said the company's core subscription business is slowing along with a slower growth rate in the number of service providers listed on the site.

Shares of Angie's List were last trading at $7.99, down 21.3 percent.